The Hedge Fund Manager Who Bucked The Trend And Became A Billionaire

There are fewer hedge fund managers on The Forbes 400 list of richest Americans than there used to be. The once-swashbuckling industry has been rocked by disappointing returns that have humbled hedge fund stock pickers, activists, macro traders and, as is natural in a long bull market, short sellers.

Mostly it has been a hedge fund desert. The names who have struggled are familiar to those who follow Wall Street: Einhorn, Paulson, Ackman, Lampert, Mindich, Perry, Jacobson, Howard, Burbank, Rosenstein and many more.

Then there is Jeffrey Talpins. At 44, Talpins has bucked the trend that has swept the hedge fund world. His Element Capital hedge fund has returned about 21% annually net of some expensive fees since its inception in 2005—an incredible track record in any era. This is a hedge fund that has grown up and excelled during the years after the financial crisis in which the vast majority of hedge funds have struggled mightily.

Forbes has been tracking Talpins’ wealth for years and now estimates that he is worth $1.7 billion. He is appearing on Forbes’ list of billionaires for the first time.

Even by the opaque standard of hedge funds, Talpins is secretive. He declined to comment for his article and has not publicly spoken to the media in many years. While there are one or two photos of Talpins floating around the Internet, Forbes does not have a legal right to publish any of them.

For years, Talpins ran a relatively small organization, but it is growing. Element Capital Management recently employed 58 people, about half of whom are investment professionals, a Securities & Exchange Commission filing shows.

A former Citigroup and Goldman Sachs fixed-income trader, Talpins is the type of macro investor who bets on interest rates, bonds and currencies. He is said to employ an investment strategy that relies heavily on options, according to the Wall Street Journal.

Last year, a terrible one for most hedge fund managers, Talpins’ hedge fund returned 17%. Not surprisingly, investors have been rushing into Element Capital Management and the firm now manages about $17 billion. It was managing $9 billion a year ago.